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As Ben Inker of GMO, a fund-management group, puts it: "Today's valuations only make sense in light of low expected [short-term] rates.
In a post on TechCrunch, Aileen Lee, of the venture firm Cowboy Ventures, analyzed thirty-nine companies founded between 2003 and 2013 with billion-dollar valuations; only two of the companies' founders lacked prior experience in tech.
We study the revenue maximization problem of a seller who is partially informed about the distribution of buyer's valuations, only knowing its first N moments.
VocalTec and Logal put on great road shows and had high valuations only to see their stock value dive shortly after their IPOs.
Of the 10 U.S.-based software and hardware companies with the largest market valuations, only Apple and Qualcomm have been spared the widespread job losses that have been plaguing corporate America over the past year.
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And these new investors have been all too willing to participate and write big checks, at lofty valuations — but only with very favorable terms for themselves.
First was its valuation: only about 13 cents on the dollar.
Goldman Sachs, for example, led a private investment round at a $50 billion valuation only a year ago, selling a third of the stock in the offering at about double the price.
Plus, from the venture firm's perspective, a heady valuation only matters so much.
In reality, valuation only works competitively (i.e. when there's a non-collusive market, even two will do), while UK startups are lucky if they get even a single offer – which by definition implies an uncompetitive valuation.
After seeing huge growth on the back of Facebook Open Graph, it raised a ton of money at a huge valuation — only to reverse course over the following months when the social traffic it was receiving started to sputter out.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com